A first-ever study by the Consumer Financial Protection Bureau of consumers’ experiences with debt collectors found that 27 percent felt threatened by collectors and three quarters were harassed after asking them to stop calling.
“The bureau today casts light on troubling problems in the debt collection industry,” said CFPB Director Richard Cordray. “More than one-in-four consumers report feeling threatened by a debt collector, and a majority of those contacted about debt say the calls persist even after requests to stop. The bureau is working to clean up abuses in this industry, and to see that all consumers are treated with fairness, decency, and respect.”
Banks and creditors hire third party companies to collect the debts after their efforts fail. It’s a multibillion-dollar business as there are more than 6,000 debt collection companies in the United States.
The CFPB study found that 70 million consumers were contacted by collectors about debts in the previous 12 months.
Among the key findings, 27 percent of those contacted by collectors said they felt threatened by the conduct of the collector, while 75 percent of the consumers who asked collectors to stop calling them said their requests were not honored.
Also, 53 percent said they were contacted in error. The creditor either sought the incorrect amount, the wrong person, or was calling about a debt that was not owed. Further, 36 percent said they were contacted at inconvenient times – between 9:00 p.m. and 8:00 a.m.
The report also found that 37 percent were contacted four or more times a week, while 17 percent were called more than eight times in a week. Finally, 15 percent said they were sued by debt collectors with 75 percent of those sued not going to court.